Insurance management learn good business strategy

Increasingly, the onus is on management level executives in the insurance industry to learn how to use groundbreaking insurance tools to maintain and control company risk and, according to consensus at Standard & Poor’s recent conference “Insurance 2005: Under the Microscope” they are doing just that. “To survive, companies need robust and dynamic risk-management processes,” Mark Puccia, managing director and criteria officer of Standard & Poor’s insurance group, says.Puccia adds that in order to be successful an insurance company’s management must be prepared to underwrite profitably through the softening of the property & casualty market. In addition he says companies managers must implement risk-management controls and strategies to properly underwrite the complex products that are currently being issued.Andrew Kilgerman, managing director of UBS Securities LLC says although these risk-management and hedging systems can be costly it’s important to spend the money and implement the right ones.”When a company says, ‘We’ve got so much scale we don’t need to hedge,’ that concerns me a little,” Kilgerman says.The consensus further indicated that the recent Spitzer investigations are reinforcing the need for this kind of strong management systems and proper understanding of all levels of company operations, especially risk and quality control through system upgrades and such. “It’s important to achieve balance between organizational change and organizational disruption,” William Wilt, vice president of Morgan Stanley, says. Stanley adds that skepticism is central component in company functioning as it means they will consistently perform better than others in the industry.